What is the best solution for an ERP implementation?
As you embark on an upcoming ERP software implementation, choosing an enterprise resource planning (ERP) software for your organization is one of several things to consider. Who to include on the team, the stages of an implementation, your implementation partner are all important decisions that need to be made prior to the project’s kickoff. Before we dive into the ERP implementation process, let’s refresh – what is ERP?
What is Enterprise Resource Planning Software?
Enterprise resource planning (ERP) software is business management software that enables organizations to use one system to manage business processes. It’s accounting and operations oriented and features one database as the master source of information for your organization. Businesses use ERP software to identify and plan the resource needs for their company.
An ERP system has numerous useful capabilities. Running your business operations through ERP software allows you to streamline operations by automating manual processes or improving them to make them more efficient. ERP solutions use modules to address business processes – they allow users to complete tasks in areas such as:
- Project management
- Supply chain management
- Inventory management
- Order processing
- Budgeting and forecasting
- And more
Two major benefits of ERP are increased efficiency and having one source of truth for business information. Using modules, such as the ones listed above, to perform business tasks provides users with a better way to track resources, visibility into their workflows, increased data security, communication tools for better collaboration and more. These improvements lead to better clarity, an enhanced strategic direction for the organization, increased customer satisfaction and greater overall company performance.
ERP software might be the right option for your company – but which one? Next, you’ll need to determine the best solution.
How to Choose the Right ERP Software for Your Business
Choosing the right ERP software for your business is not to be taken lightly. While there are many ERP vendors with good products on the market, not all are created equal or best suited to your needs. When beginning the selection process, consider these factors:
- Define your reasons for the project: ERP is a business project, not just an IT project, so take into account what your entire organization will need from it. What will success look like and what value will it bring to your company?
- Determine who will be involved: Assembling the right team is crucial. Make sure all departments that will use the system are represented. Determining project leaders, how many users you will have and the executive champion of the project are all important.
- Find an ERP implementation partner you trust: Like people, ERP vendor partners have specialties. What do you need from a partner that will ensure your project’s success? Additionally, choose a partner that uses a formal approach or methodology with a successful track record; however, flexibility is a must in order to adapt to your organization’s specific needs.
There are other factors to consider outside of the project’s logistics when determining which ERP software is best for your organization. What works for one company may not work for another, regardless of how similar they are. Examine these details before making a decision:
As in work and life, having a budget is important. Understanding your budget might guide you toward a specific ERP solution – perhaps your business can’t afford a high upfront cost. Choosing an on-premise solution that requires installing a physical server will have a higher upfront cost as opposed to a cloud-based solution that is paid for on a subscription-based plan and needs no infrastructure. Additionally, the number of users your organization needs can affect the cost significantly.
Some ERP systems aren’t necessarily industry-specific, but work better in certain industries. What solutions do your close competitors use? Is this solution optimized for your industry? How does it fix the pain points driving you to consider an ERP implementation? Each company is different, but understanding what works well for others within your industry can lead you to the best fit.
Understand your ERP requirements. Some organizations will need customizations or alterations to their system. Larger enterprises that have subsidiaries or additional offices in other locations sometimes need to alter their software in order to make it work for their operations. While we don’t recommend making customizations, choose a software that is flexible should you require them.
Technology is constantly evolving, and ERP technology is no different. Trends such as cloud ERP, mobile, artificial intelligence (AI), machine learning, Internet of Things (IoT) and more are being integrated (if they haven’t already) into business tools for companies to run their solutions faster, better and smarter. Your organization may not want to use all of what is coming down the pike in terms of future capabilities but knowing what’s on the forefront will allow you to stay ahead of the curve.
Best Practices for a Successful ERP Implementation
Implementing ERP software is a complex process, and like any other project, using best practices will help ensure a successful result. While there are a number of tactics that will lead to success, our top four recommendations are to:
- Use a methodology: Like a road trip, you need a reliable map to your project’s final destination. A methodology is an essential framework that will shape the ERP implementation process. It provides structure and will help your team tackle the complexity of the project. This will ensure that no matter who you have on your team, they’ll approach tasks using the same proven methods.
- Test (a lot): Testing is integral to knowing whether your system is properly functioning. And testing individual tasks isn’t enough – demonstrating that entire business processes work correctly proves your system can support your operations. Additionally, it’s key to involve technical and functional end users of the ERP software – testing done by your vendor should not be the only testing completed throughout the project.
- Don’t wait to integrate: Integrations should not wait until the end. Coordination with external parties take time and effort and includes the use of multiple applications and integration tools. Integrations also require involving all parties in the interface development, which means it’s necessary to set realistic expectations and assign clear responsibilities for every team member.
- Communicate often: The underlying key to the previous four recommendations is communication – clear and frequent communication can’t be stressed enough. There are many methods of communication among team members as the project progresses, so having an established communication plan early in the project is vital.
Project Management – The Factors of Success
ERP implementations are a huge investment of time, money and valuable resources. While you might have a reliable set of best practices to guide your project, exercising good project management is a necessary component to ensure your strategy works. Terillium’s president, Dave Woodworth, has developed three key strategies called the ERP Project Success Factors. These tips are curated from the hundreds of ERP projects he’s worked on throughout his 20-plus year career. His three success factors include:
Software isn’t the reason an ERP project is unsuccessful. It’s a tool, and used properly will lead to better operations. However, how people use it will affect its success or failure rate. Make sure your data is converted properly. Don’t use bad information – your data should be complete, correct and coherent, so review it before moving forward with data migration and your project as a whole. Additionally, if you require third-party solutions to be integrated with your ERP system, plan for it early and document its progress. And all along the way, develop your business reporting. One of the reasons many organizations need ERP software is for better business reporting; that needs to begin with the implementation. Know what information you need your ERP system to include to ensure you go live with the ability to create the necessary reports going forward.
Having the right people on your team is crucial. However, many businesses don’t want to spare their best employees from their normal work. It’s those people you want on the implementation team. They should know the business, be able to make decisions, come from different areas of the organization and be permitted to commit a significant amount of work time to the project. In addition, the C-suite must be involved, and one of those top executives needs to be a project sponsor in order to maintain commitment to it and be a final decision maker.
An ERP implementation includes several processes. As we discussed, using a methodology as a formal approach to structuring your project must be a requirement. A good methodology is tested, formal, complete but flexible in order to match the way your business operates. Your team should also have a communication plan, both among the team to keep the project on track and also with the rest of your employees. A training plan is also necessary. Since training should not be a one-time thing, plan to go through multiple trainings for employees periodically throughout the project. And finally, have a process for measuring success. If you don’t have quantifiable goals and benchmarks, it’s difficult to know the progress you’re making and whether you can call the end result a success.
Stages of ERP Implementation – Our Methodology
As we’ve said, having a methodology is integral to success in an ERP implementation project. Having a tested methodology is necessary because it’s the roadmap to success. A methodology creates a framework and structure that allows the project to be broken down into manageable phases. Using one that includes the experience of previous implementations removes the guesswork while ensuring all members of the team are on the same page.
Terillium’s methodology was developed through heavy testing and training, and is a result of years of experience to inform the best process for implementing ERP software. Coupled with the average 16 years of experience that our more than 170 full-time consultants possess, more than 700 clients have trusted our implementation process.
Focus on the organization of the project by defining the scope and business objectives. Also use this step to identify the project’s leaders.
Focus on your detailed business requirements. Conduct project team overview training, initial configurations, testing and documentation.
Focus on detailed system designs, development and testing. Analyze and develop training plans.
Focus on your final preparations for go-live, which will also include final testing and in-depth training. Verify all aspects are ready for your go-live.
Focus on going live, then turn your attention to support, ensuring knowledge transfer and verifying system functionality before wrapping your project.
Note that the explanation for each step begins with the word “focus” – this reiterates the importance of a structure to follow in order to ensure a successful ERP implementation.
Terillium is an award-winning Oracle Platinum Partner specializing in leading businesses through Oracle ERP system implementations for Oracle ERP Cloud, Oracle JD Edwards and Oracle NetSuite. Choosing a consulting partner is one of the most important decisions you will make in the ERP implementation process. Your partner will help you navigate the project from start to finish – and can even help you following the completion of your project.
While selecting your implementation partner doesn’t need to be the first choice you make during the ERP process, it shouldn’t come too late in the game. A certified team of consultants are technology experts and can help provide positive outcomes for your organization. When deciding on a consulting partner, you can expect them to possess some key characteristics, such as:
- Certified consultants with substantial ERP software and project experience
- Relevant experience in your industry
- A proven project methodology
- Tools for team communication and project management
- Project milestones and goals that are measurable
- Leadership that will help navigate project and change management
- Advice and expertise you can trust on the technical and functional aspects of your chosen software
While choosing your implementation partner is an important step, it’s not the only one. Do your research – know the benefits, necessary planning and top software vendors in order to make an informed decision. Then once you understand your options, you can evaluate which software best matches the needs your organization has for an ERP solution.
An important factor to consider is timing. While it may seem like there is never a perfect time to undertake a large project such as an ERP implementation, answer a few questions to determine if now is the right time to implement an ERP system:
- How accurate is your business data?
- Are your important business systems connected?
- Is your company growing (and outgrowing your current technology)?
- How satisfied are your customers?
- Do you need to reduce costs from inefficient processes or technology?
ERP implementations are not inexpensive ventures. However, they pay off in the long run for organizations who choose the right fit and a trusted partner. On average, companies that implement ERP see a return on their investment of $7 or more dollars for every dollar spent on the project and recouped their investments within a 16-month payback period. This is due to the long-term benefits an organization gains by operating their business on an ERP system.
Outside of implementations, Terillium offers additional ERP services, such as:
- Managed services
- Technology assessments
- Special projects
Terillium operates under the direction that we are only as good as our last customer reference. We’ve spent the past 20-plus years ensuring our clients are able to run more efficient business processes, better access their business data to make informed decisions and automate manual operations to save time and money. Read some of our 2019 case studies, or explore all our previous successful projects below.